Forex - Kiwi nudges higher after current account data, Japan trade ahead

Investing.com - The Kiwi gained in early Asia on Wednesday on better than expected current account data with trade in Japan on the way.

NZD/USD traded at 0.6987, up 0.02%, while USD/JPY changed hands at 123.38, up 0.01%. AUD/USD traded at 0.7751, flat, ahead of a survey on leading indicators, while EUR/USD was quoted at 1.1245, down 0.01%.

New Zealand's first quarter current account deficit came in at 3.6% of GDP, below the 3.8% expected for a quarter-on-quarter surplus of NZ$660 million, compared to NZ$230 million seen. The year-on-year deficit reached NZ$8.6 billion, narrower than the NZ$9.1 billion expected.

Also ahead in Japan, May trade data are due at 0850 Tokyo time (2350 GMT). The forecast is for a trade deficit worth ¥226 billion, which would be a second straight deficit after a deficit of ¥53 billion in April and a rare surplus of ¥227.4 billion in March, which was the first surplus in 33 months.

In Australia, comes the May Westpac-MI Leading Index at 1030 Sydney time (0030 GMT). The index was last at 98.17 in April.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was flat at 95.22.

Overnight, the dollar remained broadly higher against a basket of other major currencies on Tuesday, after the release of mixed U.S. housing data as anticipation ahead of the Federal Reserve's monthly policy meeting continued to lend support.

The U.S. Commerce Department reported that the number of building permits issued last month increased by 11.8% to 1.275 million units from April’s total of 1.140 million. Analysts expected building permits to fall by 3.5% to 1.100 million units in May.

The report also showed that U.S. housing starts plunged by 11.1% in May to hit 1.036 million units from April’s total of 1.165 million units, worse than expectations for a decline of 3.1% to 1.100 million.

Market participants were looking ahead to the outcome of the Fed's latest policy meeting on Wednesday for a clear signal on when it could start to raise interest rates.

The euro remained vulnerable after talks between Greece and European officials ended without an agreement on a cash-for-reforms deal over the weekend, fueling fears over a debt default that would threaten Greece’s future in the euro zone.

Prime Minister Alexis Tsipras told opposition leaders on Tuesday that Greece will not pay the International Monetary Fund on June 30 if a deal with creditors is not reached.

Greek Finance Minister Yanis Varoufakis said earlier Tuesday that he was not planning to present new reform proposals at a meeting of the Eurogroup of euro zone finance ministers due to be held on Thursday.